Land sale can pay for sports park, study finds

Shaun McCutcheon, manager at John Burns Real Estate Consulting, left, delivers a presentation Chiquita Ridge during Wednesday's Rancho Santa Margarita City Council meeting. Barry Gross, president of Developers Research, stands next to McCutcheon. Gross told the council the city could build and sustain a sports park on the 92-acre property. TOMOYA SHIMURA, ORANGE COUNTY REGISTER

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Rancho Santa Margarita can pay for the cost of building a sports park at Chiquita Ridge by selling part of the land for residential or retail development, according to a preliminary study by a consulting firm.

The City Council is in the early stages of evaluating possible uses of the property and agreed Wednesday to further study the issue.

"We want to make sure we've done enough homework," Mayor Anthony Beall said before the meeting.

Barry Gross, president of Developers Research, told the council he had no doubt Chiquita Ridge has a tremendous value for development. Gross even said he would pay as much as $23 million for the property if the city offered it to him.

"For that price at that location, I'll buy it," Gross said. "I really would. And I'm not a developer."

Here are five things you need to know about Chiquita Ridge:

A sports park is part of the development package.

Rancho Santa Margarita acquired the 92-acre property after the city settled a lawsuit with the county in 2009. As part of the agreement, the city must dedicate at least 23 acres to a sports park if it decides to develop any of the land.

That would leave less than 32 acres for other development, because the city needs to preserve 37 acres for open space. The initial cost of a sports park is estimated at $16.4 million, according to Developers Research.

The Chiquita Ridge project is one of the top priorities for the City Council partly because Rancho Santa Margarita suffers from a shortage of sports fields, Beall said in his 2012 State of the City address.

Residential use would bring quick cash to the city.

Selling the land to a homebuilder would immediately cover the cost of developing the sports park because the demand for new homes is high in the area, according to Developers Research.

The city could get more than $24 million from selling the land for residential development, Gross said.

Retail use means more long-term revenue.

Though the city would initially lose money by selling Chiquita Ridge for retail development, the increase in sales tax could generate more revenue for the city in 40 years than residential development, according to Developers Research.

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